A nonprofit nursing home run by nuns will not have to pay a penalty for refusing to provide contraception coverage while a court case is pending.

The Supreme Court on Friday granted a temporary exemption from Obamacare's contraception mandate to a religious nonprofit organization that sued the administration on the grounds that the mandate violated its religious beliefs.

The case of Little Sisters of the Poor, a nursing home run by Catholic nuns, will return to the 10th U.S. Circuit Court of Appeals in Denver for a ruling on the nonprofit's suit. But thanks to Friday's ruling, Little Sisters will not be penalized for not covering contraception for its employees while the case is pending.

Justice Sonia Sotomayor referred the case to the full Court following her decision on New Year's Eve to grant Little Sisters a preliminary injunction. Had Sotomayor not granted the reprieve before Jan. 1—when the mandate took effect—Little Sisters would have had to pay a penalty or comply.

"Compliance" with Obamacare's mandate, however, does not mean Little Sisters would have had to pay for its employees' contraception.

As stated under the law, religious organizations are exempt from the mandate requiring employers to include contraceptive services in employees' health plans.

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Because Little Sisters is a religiously affiliated organization—rather than a religious organization, such as a church—it did not qualify for the exemption.

Instead, it was covered under a separate, compromise regulation the Obama administration issued almost one year ago. Under that deal, Little Sisters—and thousands of other similarly classified organizations who objected to the mandate on grounds that it violated their religious liberty—would have to sign a form indicating that they objected to providing contraception on religious grounds. In exchange, they would not be penalized for failing to meet the mandate, because the insurance company would instead pay for the contraceptive coverage for their employees.

Little Sisters argues that by signing the form that "triggers the start of coverage," they are complicit in the act of providing contraception. "In good conscience, they cannot do that," wrote the lawyers for the Becket Fund for Religious Liberty, the firm representing Little Sisters. "So the 'accommodation' still violates their religious beliefs."

In December, the Denver appellate court declined to grant a preliminary injunction, judging that the Little Sisters "reads too much into the language of the form, which requires only that the individual signing it certify that her organization opposes providing contraceptive coverage."

After Little Sisters filed an emergency appeal to the Supreme Court, the Obama administration had hoped the justices would agree, but its defeat Friday may only be temporary: The Court stressed it was not ruling on the merits of Little Sisters' case in issuing the decision to continue the stay.

While the Supreme Court won't be taking up the Little Sisters case, it is scheduled to review a claim by for-profit companies with religious objections to the contraception mandate on March 25, a debate which will require the Court to review whether corporations First Amendment rights—extended through the Citizens United decision—include religious rights.